Carl T. Camden, President and Chief Executive Officer, announced revenue for the second quarter of 2008 totaled $1.5 billion, a 3% increase compared to the corresponding quarter in 2007.
Earnings from operations for the second quarter of 2008 totaled $15.0 million, a 33% decrease compared to $22.3 million reported for the second quarter of 2007. Included in earnings from operations in the second quarter of 2007 are $2.4 million of restructuring costs related to our UK operations and a $3.8 million benefit related to a temporary change in the French payroll tax law.
Diluted earnings per share from continuing operations in the second quarter of 2008 were $0.30, a decrease of 27% as compared to second quarter 2007 earnings of $0.41 per share. Included in second quarter 2007 diluted earnings is the $0.07 per share cost of the UK restructuring and $0.07 per share benefit related to the temporary change in the French payroll tax law.
Commenting on the results, Camden said, "Our second quarter performance reflects the deterioration in economic conditions and the further weakening of the staffing market, particularly in the U.S. These conditions are now beginning to ripple through other parts of the global economy."
Camden concluded, "Given this economic uncertainty continuing to cloud the outlook for our industry, we have elected not to provide quarterly earnings guidance. We remain focused on building value for our shareholders by executing our strategy to diversify geographically, moving into higher-margin, fee-based business, expanding our professional and technical businesses, and improving operating margins."
In conjunction with its second quarter earnings release, Kelly Services, Inc. will host a conference call at 9:00 a.m. (ET) on July 22, 2008 to review the results and answer questions. The call may be accessed in one of the following ways:
Via the Telephone:
U.S. 1-800-553-0272 International 1-612-288-0329
The pass code is Kelly Services
Via the Internet:
The call is also available via the internet through the Kelly Services website: www.kellyservices.com
This release contains statements that are forward looking in nature and accordingly, are subject to risks and uncertainties. These factors include: competition, changing market and economic conditions, currency fluctuations, changes in laws and regulations, including tax laws, and other factors discussed in this release and in the company's filings with the Securities and Exchange Commission. Actual results may differ materially from any projections contained herein.
About Kelly Services
Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB) is a world leader in human resources solutions headquartered in Troy, Michigan, offering temporary staffing services, outsourcing, vendor on-site and full-time placement to clients on a global basis. Kelly provides employment to more than 750,000 employees annually, with skills including office services, accounting, engineering, information technology, law, science, marketing, creative services, light industrial, education, and health care. Revenue in 2007 was $5.7 billion. Visit www.kellyservices.com.
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 13 WEEKS ENDED JUNE 29, 2008 AND JULY 1, 2007
(UNAUDITED)
(In thousands of dollars except per share data)
%
2008 2007 Change Change
----------- ----------- ----------- ------
Revenue from services $ 1,452,007 $ 1,415,674 $ 36,333 2.6 %
Cost of services 1,194,605 1,168,108 26,497 2.3
----------- ----------- ----------- ------
Gross profit 257,402 247,566 9,836 4.0
Selling, general and
administrative expenses 242,448 225,300 17,148 7.6
----------- ----------- ----------- ------
Earnings from operations 14,954 22,266 (7,312) (32.8)
Other income, net 149 930 (781) (84.0)
----------- ----------- ----------- ------
Earnings from continuing
operations before taxes 15,103 23,196 (8,093) (34.9)
Income taxes 4,673 7,885 (3,212) (40.7)
----------- ----------- ----------- ------
Earnings from continuing
operations 10,430 15,311 (4,881) (31.9)
Earnings from discontinued
operations, net of tax 87 18 69 383.3
----------- ----------- ----------- ------
Net earnings $ 10,517 $ 15,329 $ (4,812) (31.4)%
=========== =========== =========== ======
Basic earnings per share
Earnings from continuing
operations $ 0.30 $ 0.42 $ (0.12) (28.6)%
Earnings from discontinued
operations - - - -
----------- ----------- ----------- ------
Net earnings $ 0.30 $ 0.42 $ (0.12) (28.6)%
=========== =========== =========== ======
Diluted earnings per share
Earnings from continuing
operations $ 0.30 $ 0.41 $ (0.11) (26.8)%
Earnings from discontinued
operations - - - -
----------- ----------- ----------- ------
Net earnings $ 0.30 $ 0.41 $ (0.11) (26.8)%
=========== =========== =========== ======
STATISTICS:
Gross profit rate 17.7% 17.5% 0.2 pts.
Selling, general and
administrative expenses:
% of revenue 16.7 15.9 0.8
% of gross profit 94.2 91.0 3.2
% Return - Earnings from
operations 1.0 1.6 (0.6)
Earnings from continuing
operations before taxes 1.0 1.6 (0.6)
Earnings from continuing
operations 0.7 1.1 (0.4)
Net earnings 0.7 1.1 (0.4)
Effective income tax rate 30.9% 34.0% (3.1) pts.
Average number of shares
outstanding (thousands):
Basic 34,696 36,658
Diluted 34,805 36,962
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 26 WEEKS ENDED JUNE 29, 2008 AND JULY 1, 2007
(UNAUDITED)
(In thousands of dollars except per share data)
%
2008 2007 Change Change
----------- ----------- ----------- ------
Revenue from services $ 2,840,451 $ 2,766,532 $ 73,919 2.7 %
Cost of services 2,333,162 2,289,758 43,404 1.9
----------- ----------- ----------- ------
Gross profit 507,289 476,774 30,515 6.4
Selling, general and
administrative expenses 479,395 444,015 35,380 8.0
----------- ----------- ----------- ------
Earnings from operations 27,894 32,759 (4,865) (14.9)
Other income, net 98 1,603 (1,505) (93.9)
----------- ----------- ----------- ------
Earnings from continuing
operations before taxes 27,992 34,362 (6,370) (18.5)
Income taxes 9,571 13,793 (4,222) (30.6)
----------- ----------- ----------- ------
Earnings from continuing
operations 18,421 20,569 (2,148) (10.4)
Earnings from discontinued
operations, net of tax 325 6,675 (6,350) (95.1)
----------- ----------- ----------- ------
Net earnings $ 18,746 $ 27,244 $ (8,498) (31.2)%
=========== =========== =========== ======
Basic earnings per share
Earnings from continuing
operations $ 0.53 $ 0.56 $ (0.03) (5.4)%
Earnings from discontinued
operations 0.01 0.18 (0.17) (94.4)
----------- ----------- ----------- ------
Net earnings $ 0.54 $ 0.74 $ (0.20) (27.0)%
=========== =========== =========== ======
Diluted earnings per share
Earnings from continuing
operations $ 0.53 $ 0.56 $ (0.03) (5.4)%
Earnings from discontinued
operations 0.01 0.18 (0.17) (94.4)
----------- ----------- ----------- ------
Net earnings $ 0.54 $ 0.74 $ (0.20) (27.0)%
=========== =========== =========== ======
STATISTICS:
Gross profit rate 17.9% 17.2% 0.7 pts.
Selling, general and
administrative expenses:
% of revenue 16.9 16.0 0.9
% of gross profit 94.5 93.1 1.4
% Return - Earnings from
operations 1.0 1.2 (0.2)
Earnings from continuing
operations before taxes 1.0 1.2 (0.2)
Earnings from continuing
operations 0.6 0.7 (0.1)
Net earnings 0.7 1.0 (0.3)
Effective income tax rate 34.2% 40.1% (5.9) pts.
Average number of shares
outstanding (thousands):
Basic 34,760 36,585
Diluted 34,878 36,948
KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In thousands of dollars)
Second Quarter
%
2008 2007 Change Change
----------- ----------- --------- ------
Revenue from Services:
Americas Commercial $ 654,167 $ 696,974 $ (42,807) (6.1)%
Americas PT 238,493 236,406 2,087 0.9
----------- ----------- --------- ------
Total Americas Commercial
and PT 892,660 933,380 (40,720) (4.4)
EMEA Commercial 351,677 321,229 30,448 9.5
EMEA PT 46,315 39,165 7,150 18.3
----------- ----------- --------- ------
Total EMEA Commercial and PT 397,992 360,394 37,598 10.4
APAC Commercial 90,895 77,888 13,007 16.7
APAC PT 9,411 5,917 3,494 59.1
----------- ----------- --------- ------
Total APAC Commercial and PT 100,306 83,805 16,501 19.7
OCG 61,049 38,095 22,954 60.3
----------- ----------- --------- ------
Consolidated Total $ 1,452,007 $ 1,415,674 $ 36,333 2.6 %
=========== =========== ========= ======
Earnings from Operations:
Americas Commercial $ 19,706 $ 25,063 $ (5,357) (21.4)%
Americas PT 14,101 13,803 298 2.2
----------- ----------- --------- ------
Total Americas Commercial
and PT 33,807 38,866 (5,059) (13.0)
EMEA Commercial 1,339 3,476 (2,137) (61.5)
EMEA PT 1,370 433 937 216.4
----------- ----------- --------- ------
Total EMEA Commercial and PT 2,709 3,909 (1,200) (30.7)
APAC Commercial 514 1,498 (984) (65.7)
APAC PT (151) (233) 82 35.2
----------- ----------- --------- ------
Total APAC Commercial and PT 363 1,265 (902) (71.3)
OCG 857 649 208 32.0
Corporate Expense (22,782) (22,423) (359) (1.6)
----------- ----------- --------- ------
Consolidated Total $ 14,954 $ 22,266 $ (7,312) (32.8)%
=========== =========== ========= ======
Earnings from Operations
(Excluding Restructuring
Charges):
Americas Commercial $ 19,706 $ 25,063 $ (5,357) (21.4)%
Americas PT 14,101 13,803 298 2.2
----------- ----------- --------- ------
Total Americas Commercial
and PT 33,807 38,866 (5,059) (13.0)
EMEA Commercial 1,339 5,924 (4,585) (77.4)
EMEA PT 1,370 433 937 216.4
----------- ----------- --------- ------
Total EMEA Commercial and PT 2,709 6,357 (3,648) (57.4)
APAC Commercial 514 1,498 (984) (65.7)
APAC PT (151) (233) 82 35.2
----------- ----------- --------- ------
Total APAC Commercial and PT 363 1,265 (902) (71.3)
OCG 857 649 208 32.0
Corporate Expense (22,782) (22,423) (359) (1.6)
----------- ----------- --------- ------
Consolidated Total $ 14,954 $ 24,714 $ (9,760) (39.5)%
=========== =========== ========= ======
KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In thousands of dollars)
June Year to Date
%
2008 2007 Change Change
----------- ----------- --------- ------
Revenue from Services:
Americas Commercial $ 1,294,106 $ 1,381,025 $ (86,919) (6.3)%
Americas PT 470,670 464,035 6,635 1.4
----------- ----------- --------- ------
Total Americas Commercial
and PT 1,764,776 1,845,060 (80,284) (4.4)
EMEA Commercial 673,586 618,668 54,918 8.9
EMEA PT 90,102 75,281 14,821 19.7
----------- ----------- --------- ------
Total EMEA Commercial and PT 763,688 693,949 69,739 10.0
APAC Commercial 177,588 140,687 36,901 26.2
APAC PT 17,897 10,516 7,381 70.2
----------- ----------- --------- ------
Total APAC Commercial and PT 195,485 151,203 44,282 29.3
OCG 116,502 76,320 40,182 52.6
----------- ----------- --------- ------
Consolidated Total $ 2,840,451 $ 2,766,532 $ 73,919 2.7 %
=========== =========== ========= ======
Earnings from Operations:
Americas Commercial $ 41,901 $ 48,170 $ (6,269) (13.0)%
Americas PT 28,204 27,355 849 3.1
----------- ----------- --------- ------
Total Americas Commercial
and PT 70,105 75,525 (5,420) (7.2)
EMEA Commercial (240) (992) 752 75.8
EMEA PT 2,394 749 1,645 219.6
----------- ----------- --------- ------
Total EMEA Commercial and PT 2,154 (243) 2,397 NM
APAC Commercial 579 2,174 (1,595) (73.4)
APAC PT (361) (380) 19 5.0
----------- ----------- --------- ------
Total APAC Commercial and PT 218 1,794 (1,576) (87.8)
OCG 2,674 1,176 1,498 127.4
Corporate Expense (47,257) (45,493) (1,764) (3.9)
----------- ----------- --------- ------
Consolidated Total $ 27,894 $ 32,759 $ (4,865) (14.9)%
=========== =========== ========= ======
Earnings from Operations
(Excluding Restructuring
Charges):
Americas Commercial $ 41,901 $ 48,170 $ (6,269) (13.0)%
Americas PT 28,204 27,355 849 3.1
----------- ----------- --------- ------
Total Americas Commercial
and PT 70,105 75,525 (5,420) (7.2)
EMEA Commercial (240) 4,090 (4,330) (105.9)
EMEA PT 2,394 749 1,645 219.6
----------- ----------- --------- ------
Total EMEA Commercial and PT 2,154 4,839 (2,685) (55.5)
APAC Commercial 579 2,174 (1,595) (73.4)
APAC PT (361) (380) 19 5.0
----------- ----------- --------- ------
Total APAC Commercial and PT 218 1,794 (1,576) (87.8)
OCG 2,674 1,176 1,498 127.4
Corporate Expense (47,257) (45,493) (1,764) (3.9)
----------- ----------- --------- ------
Consolidated Total $ 27,894 $ 37,841 $ (9,947) (26.3)%
=========== =========== ========= ======
KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF CONSTANT CURRENCY
REVENUE FROM SERVICES TO REPORTED REVENUE FROM SERVICES
(UNAUDITED)
(In thousands of dollars)
Second Quarter
2008 2007 Change % Change
----------- ----------- ---------- ---------
Revenue from services -
constant currency*:
Americas Commercial $ 648,620 $ 696,974 $ (48,354) (6.9)%
Americas PT 238,248 236,406 1,842 0.8
----------- ----------- ---------- ---------
Total Americas
Commercial and PT -
constant currency* 886,868 933,380 (46,512) (5.0)
EMEA Commercial 317,593 321,229 (3,636) (1.1)
EMEA PT 41,346 39,165 2,181 5.6
----------- ----------- ---------- ---------
Total EMEA Commercial
and PT - constant
currency* 358,939 360,394 (1,455) (0.4)
APAC Commercial 82,971 77,888 5,083 6.5
APAC PT 8,424 5,917 2,507 42.4
----------- ----------- ---------- ---------
Total APAC Commercial
and PT - constant
currency* 91,395 83,805 7,590 9.1
OCG 59,774 38,095 21,679 56.9
----------- ----------- ---------- ---------
Total revenue from
services - constant
currency* 1,396,976 1,415,674 (18,698) (1.3)%
Foreign currency impact 55,031 55,031
----------- ----------- ---------- ---------
Revenue from services $ 1,452,007 $ 1,415,674 $ 36,333 2.6 %
=========== =========== ========== =========
June Year to Date
2008 2007 Change % Change
----------- ----------- ---------- ---------
Revenue from services -
constant currency*:
Americas Commercial $ 1,279,931 $ 1,381,025 $ (101,094) (7.3)%
Americas PT 469,990 464,035 5,955 1.3
----------- ----------- ---------- ---------
Total Americas
Commercial and PT -
constant currency* 1,749,921 1,845,060 (95,139) (5.2)
EMEA Commercial 610,257 618,668 (8,411) (1.4)
EMEA PT 80,821 75,281 5,540 7.4
----------- ----------- ---------- ---------
Total EMEA Commercial
and PT - constant
currency* 691,078 693,949 (2,871) (0.4)
APAC Commercial 160,475 140,687 19,788 14.1
APAC PT 15,942 10,516 5,426 51.6
----------- ----------- ---------- ---------
Total APAC Commercial
and PT - constant
currency* 176,417 151,203 25,214 16.7
OCG 114,113 76,320 37,793 49.5
----------- ----------- ---------- ---------
Total revenue from
services - constant
currency* 2,731,529 2,766,532 (35,003) (1.3)%
Foreign currency impact 108,922 108,922
----------- ----------- ---------- ---------
Revenue from services $ 2,840,451 $ 2,766,532 $ 73,919 2.7 %
=========== =========== ========== =========
* Information on constant currencies is provided to allow investors to
separate the impact of foreign currency translations on reported
results. Constant currency results are calculated by translating the
current year results at prior year average exchange rates.
KELLY SERVICES, INC. AND SUBSIDIARIES
SUMMARY OF DISCONTINUED OPERATIONS
(UNAUDITED)
(In thousands of dollars)
Second Quarter June Year to Date
----------------- -----------------
2008 2007 2008 2007
-------- -------- -------- --------
Revenue from services $ - $ - $ - $ 14,777
Operating income from discontinued
operations $ 141 $ 29 $ 526 $ 827
Less: Income taxes 54 11 201 318
-------- -------- -------- --------
Earnings from discontinued operations,
net of tax 87 18 325 509
-------- -------- -------- --------
Gain on sale of discontinued operations - - - 10,153
Less: Income taxes - - - 3,987
-------- -------- -------- --------
Gain on sale of discontinued
operations, net of tax - - - 6,166
-------- -------- -------- --------
Discontinued operations, net of tax $ 87 $ 18 $ 325 $ 6,675
======== ======== ======== ========
Effective March 31, 2007, the Company sold Kelly Home Care ("KHC"), a
wholly owned subsidiary. Effective December 31, 2006, the Company sold
Kelly Staff Leasing ("KSL"), a wholly owned subsidiary. The operating
results for KHC and KSL, as well as the gain on the sale of KHC, have been
excluded from earnings from continuing operations. This schedule provides
information on KHC's and KSL's results from operations for the second
quarter of 2008 and 2007 and June year to date 2008 and 2007, as well as
the gain on the sale of KHC, all of which are included as discontinued
operations on the face of the statements of earnings.
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands of dollars)
June 29, December 30, July 1,
2008 2007 2007
----------- ----------- -----------
Current Assets
Cash and equivalents $ 85,369 $ 92,817 $ 112,463
Trade accounts receivable, less
allowances of $16,952, $18,172
and $17,348, respectively 952,511 888,334 869,256
Prepaid expenses and other current
assets 55,882 53,392 49,293
Deferred taxes 23,151 29,294 27,960
----------- ----------- -----------
Total current assets 1,116,913 1,063,837 1,058,972
Property and Equipment, Net 172,513 178,019 171,675
Noncurrent Deferred Taxes 53,058 43,436 37,231
Goodwill, Net 145,202 147,168 122,282
Other Assets 141,854 141,537 143,815
----------- ----------- -----------
Total Assets $ 1,629,540 $ 1,573,997 $ 1,533,975
=========== =========== ===========
Current Liabilities
Short-term borrowings $ 44,962 $ 49,729 $ 77,165
Accounts payable 209,899 171,471 153,373
Accrued payroll and related taxes 290,777 270,575 265,065
Accrued insurance 23,027 23,696 25,601
Income and other taxes 65,076 69,779 63,379
----------- ----------- -----------
Total current liabilities 633,741 585,250 584,583
Noncurrent Liabilities
Long-term debt 51,349 48,394 -
Accrued insurance 58,817 60,404 60,413
Accrued retirement benefits 76,189 78,382 78,861
Other long-term liabilities 15,436 13,338 19,802
----------- ----------- -----------
Total noncurrent
liabilities 201,791 200,518 159,076
Stockholders' Equity
Common stock 40,116 40,116 40,116
Treasury stock (111,434) (106,312) (72,054)
Paid-in capital 33,257 34,500 32,112
Earnings invested in the business 786,597 777,338 753,409
Accumulated other comprehensive
income 45,472 42,587 36,733
----------- ----------- -----------
Total stockholders'
equity 794,008 788,229 790,316
----------- ----------- -----------
Total Liabilities and Stockholders'
Equity $ 1,629,540 $ 1,573,997 $ 1,533,975
=========== =========== ===========
----------- ----------- -----------
STATISTICS:
Working Capital $ 483,172 $ 478,587 $ 474,389
Current Ratio 1.8 1.8 1.8
Debt-to-capital % 10.8% 11.1% 8.9%
Global Days Sales Outstanding 51 49 51
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 26 WEEKS ENDED JUNE 29, 2008 AND JULY 1, 2007
(UNAUDITED)
(In thousands of dollars)
2008 2007
--------- ---------
Cash flows from operating activities
Net earnings $ 18,746 $ 27,244
Noncash adjustments:
Depreciation and amortization 22,504 20,868
Provision for bad debts 1,962 2,346
Stock-based compensation 1,637 1,361
Gain on sale of discontinued operations - (6,166)
Other, net 1,824 (371)
Changes in operating assets and liabilities (5,370) (15,608)
--------- ---------
Net cash from operating activities 41,303 29,674
--------- ---------
Cash flows from investing activities
Capital expenditures (15,614) (21,295)
Acquisition of companies, net of cash received (10,607) (24,733)
Proceeds from sale of discontinued operations - 12,500
Other investing activities (433) (754)
--------- ---------
Net cash from investing activities (26,654) (34,282)
--------- ---------
Cash flows from financing activities
Net decrease in revolving line of credit (7,388) (720)
Proceeds from debt - 8,223
Dividend payments (9,487) (9,271)
Purchase of treasury stock (7,975) -
Stock options and other stock sales 53 5,649
Other financing activities (704) (6,509)
--------- ---------
Net cash from financing activities (25,501) (2,628)
--------- ---------
Effect of exchange rates on cash and equivalents 3,404 1,271
--------- ---------
Net change in cash and equivalents (7,448) (5,965)
Cash and equivalents at beginning of period 92,817 118,428
--------- ---------
Cash and equivalents at end of period $ 85,369 $ 112,463
========= =========
KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In thousands of dollars)
Second Quarter
-----------------------------------------------
% Change
Constant
2008 2007 US$ Currency
----------- ----------- --------- ---------
Americas
United States $ 839,110 $ 866,447 (3.2)% (3.2)%
Canada 63,661 64,023 (0.6) (8.5)
Puerto Rico 20,653 19,419 6.4 6.4
Mexico 19,600 18,715 4.7 0.5
----------- ----------- --------- ---------
Total Americas 943,024 968,604 (2.6) (3.2)
EMEA
United Kingdom 109,919 118,522 (7.3) (6.6)
France 95,418 76,456 24.8 7.7
Switzerland 52,265 44,828 16.6 (1.7)
Italy 37,434 33,624 11.3 (3.9)
Norway 24,256 18,481 31.2 11.0
Germany 22,805 15,379 48.3 27.9
Russia 22,501 16,172 39.1 27.2
Other 40,894 37,394 9.4 (5.6)
----------- ----------- --------- ---------
Total EMEA 405,492 360,856 12.4 1.3
APAC
Australia 38,040 31,637 20.2 5.9
Singapore 18,714 14,590 28.3 14.9
Other 46,737 39,987 16.9 10.2
----------- ----------- --------- ---------
Total APAC 103,491 86,214 20.0 9.4
Total Kelly Services, Inc. $ 1,452,007 $ 1,415,674 2.6 % (1.3)%
=========== =========== ========= =========
KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In thousands of dollars)
June Year to Date
-----------------------------------------------
% Change
Constant
2008 2007 US$ Currency
----------- ----------- --------- ---------
Americas
United States $ 1,659,850 $ 1,718,719 (3.4)% (3.4)%
Canada 125,500 123,467 1.6 (9.6)
Puerto Rico 39,496 38,172 3.5 3.5
Mexico 37,270 35,730 4.3 1.1
----------- ----------- --------- ---------
Total Americas 1,862,116 1,916,088 (2.8) (3.6)
EMEA
United Kingdom 214,798 236,405 (9.1) (9.3)
France 182,020 145,427 25.2 8.7
Switzerland 94,456 81,389 16.1 (0.9)
Italy 72,786 63,986 13.8 (1.2)
Norway 44,232 34,621 27.8 8.6
Germany 44,178 28,897 52.9 32.8
Russia 43,245 31,334 38.0 26.6
Other 81,352 72,733 11.9 (2.7)
----------- ----------- --------- ---------
Total EMEA 777,067 694,792 11.8 1.2
APAC
Australia 73,740 60,938 21.0 5.9
Singapore 36,505 27,720 31.7 19.5
Other 91,023 66,994 35.9 25.4
----------- ----------- --------- ---------
Total APAC 201,268 155,652 29.3 16.7
Total Kelly Services, Inc. $ 2,840,451 $ 2,766,532 2.7 % (1.3)%
=========== =========== ========= =========
KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
(In thousands of dollars except per share data)
Second Quarter
-------------------------------------------
2008 2007
--------------------- --------------------
Amount Per Share Amount Per Share
---------- ---------- --------- ---------
Earnings from continuing
operations $ 10,430 $ 0.30 $ 15,311 $ 0.41
U.K. restructuring charge(1) - - 2,448 0.07
---------- ---------- --------- ---------
Earnings from continuing
operations excluding the U.K.
restructuring charge $ 10,430 $ 0.30 $ 17,759 $ 0.48
========== ========== ========= =========
Second Quarter
------------------------------------------
2008 2007 % Change
---------- --------- ---------
Selling, general and
administrative expenses $ 242,448 $ 225,300
U.K. restructuring charge(1) - (2,448)
---------- ---------
Selling, general and
administrative expenses
excluding the U.K.
restructuring charge $ 242,448 $ 222,852 8.8%
========== ========= =========
Earnings from operations $ 14,954 $ 22,266
U.K. restructuring charge(1) - 2,448
---------- ---------
Earnings from operations
excluding the U.K.
restructuring charge $ 14,954 $ 24,714 (39.5%)
========== ========= =========
EMEA Commercial selling,
general and administrative
expenses $ 59,807 $ 55,762
U.K. restructuring charge(1) - (2,448)
---------- ---------
EMEA Commercial selling,
general and administrative
expenses excluding the U.K.
restructuring charge $ 59,807 $ 53,314 12.2%
========== ========= =========
EMEA Commercial earnings
from operations $ 1,339 $ 3,476
U.K. restructuring charge(1) - 2,448
---------- ---------
EMEA Commercial earnings from
operations excluding the U.K.
restructuring charge $ 1,339 $ 5,924 (77.4%)
========== ========= =========
EMEA Commercial and PT
earnings from operations $ 2,709 $ 3,909
U.K. restructuring charge(1) - 2,448
---------- ---------
EMEA Commercial and PT
earnings from operations
excluding the U.K.
restructuring charge $ 2,709 $ 6,357 (57.4%)
========== ========= =========
KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
(In thousands of dollars except per share data)
June Year to Date
------------------------------------------
2008 2007
-------------------- --------------------
Amount Per Share Amount Per Share
--------- ---------- --------- ---------
Earnings from continuing
operations $ 18,421 $ 0.53 $ 20,569 $ 0.56
U.K. restructuring charge(1) - - 5,082 0.14
--------- ---------- --------- ---------
Earnings from continuing
operations excluding
the U.K. restructuring
charge $ 18,421 $ 0.53 $ 25,651 $ 0.69
========= ========== ========= =========
June Year to Date
-----------------------------------------
2008 2007 % Change
--------- --------- ---------
Selling, general and
administrative expenses $ 479,395 $ 444,015
U.K. restructuring charge(1) - (5,082)
--------- ---------
Selling, general and
administrative expenses
excluding the U.K.
restructuring charge $ 479,395 $ 438,933 9.2%
========= ========= =========
Earnings from operations $ 27,894 $ 32,759
U.K. restructuring charge(1) - 5,082
--------- ---------
Earnings from operations
excluding the U.K.
restructuring charge $ 27,894 $ 37,841 (26.3%)
========= ========= =========
EMEA Commercial selling,
general and administrative
expenses $ 116,998 $ 109,210
U.K. restructuring charge(1) - (5,082)
--------- ---------
EMEA Commercial selling,
general and administrative
expenses excluding the U.K.
restructuring charge $ 116,998 $ 104,128 12.4%
========= ========= =========
EMEA Commercial earnings
from operations $ (240) $ (992)
U.K. restructuring charge(1) - 5,082
--------- ---------
EMEA Commercial earnings from
operations excluding the U.K.
restructuring charge $ (240) $ 4,090 (105.9%)
========= ========= =========
EMEA Commercial and PT
earnings from operations $ 2,154 $ (243)
U.K. restructuring charge(1) - 5,082
--------- ---------
EMEA Commercial and PT
earnings from operations
excluding the U.K.
restructuring charge $ 2,154 $ 4,839 (55.5%)
========= ========= =========
KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
(In thousands of dollars except per share Data)
Management believes that the non-GAAP (Generally Accepted Accounting
Principles) information excluding the restructuring charge from prior year
results is useful to understand the Company's fiscal 2008 financial
performance and increases comparability. Specifically, Management believes
that excluding this item allows for a more meaningful comparison of current
period operating performance with the operating results of prior periods.
These non-GAAP measures may have limitations as analytical tools because
they exclude items which can have a material impact on cash flow and
earnings per share. As a result, Management considers these measures,
along with reported results, when it reviews and evaluates the Company's
financial performance. Management believes that these measures provide
greater transparency to investors and provide insight into how Management
is evaluating the Company's financial performance. Non-GAAP measures should
not be considered a substitute for, or superior to, measures of financial
performance prepared in accordance with GAAP.
(1) The U.K. restructuring charge is comprised of facility exit costs
associated with the closure of 22 branch locations and the accelerated
depreciation of the leasehold improvements and personal property at the
impacted locations.
ANALYST CONTACT:
James Polehna
(248) 244-4586
james_polehna@kellyservices.com
MEDIA CONTACT:
James McIntire
(248) 244-5370
james_mcintire@kellyservices.com
